How will Uganda’s oil discovery affect its relations with neighbouring countries?

It is very hard to say. The prospect of Uganda becoming an exporter of refined oil products to neighbouring countries is real and enticing. Greater prosperity in Uganda would likely stimulate regional trade in other products, with gains all round. Doubly-landlocked Rwanda could certainly benefit from cheaper oil imports direct from Uganda.

However, regional trade and relationships also turn on the complex and shifting fortunes of the East African Community project, which is currently strained by conflicts of interest over trade agreements with the European Community. At the same time, further discoveries from ongoing oil prospecting in Kenya, Tanzania, and the DRC could affect demand for products refined in Uganda. The picture is further complicated by the fact that newly independent South Sudan is now discussing pipeline and refinery projects with Kenya.

Cross-border conflicts with the DRC are possible, since the oil-rich areas straddle the border between the two countries and their recent relationship has been volatile. Early, frank and serious discussions between the two governments are highly desirable.

Together, this mix of developments makes it very hard to guess the future.